The majority of the Big Pharma firms already reported second-quarter results that either met or exceeded our projections. Further, Bristol-Myers Squibb, Eli Lilly, Novartis, Pfizer, and Wyeth raised their projections for the remainder of the year. We believe the main reasons behind the strong results and improved outlook include the inelastic demand for drugs, price increases ahead of potential legislative efforts to curb reimbursement, as well as strong cost-containment efforts.
We had expected drugs sales to remain relatively stable in the current economic downturn and have left our fair value estimates for large drug companies largely unchanged. While patent losses and foreign exchange head winds have been a drag on top-line growth, organic results have been strong, supporting our outlook for a stable drug growth environment.
Further, we believe the encroaching patent cliff for several firms are forcing their hands in cutting bloated infrastructure. Built up in the heydays of the 1990s, pharmaceutical firms are cutting their excessive salesforces and getting leaner in manufacturing and administration. We expect this trend to continue led by Pfizer and Merck. Also, we believe the recent cost-cutting efforts have not impeded drug sales. We expect additional cost cuts will not materially hurt total sales growth as companies trim down to more efficient levels.
The last remaining companies to report second-quarter results include AstraZeneca and Sanofi, both of which are scheduled to report this week. We expect both companies will follow the industry lead and post steady sales and earnings growth. Further, we expect Astra to provide an update on their marketing plans for diabetes drug Onglyza following its expected approval in late July. For Sanofi, we believe management will address concerns surrounding the cancer risks associated with its leading insulin drug Lantus. While we reduced our Lantus projections based on cancer concerns highlighted in a few recent studies, we believe our projections could now prove overly conservative based on subsequent studies supporting Lantus' safety profile.
